The Philippines has maintained its economic growth targets for this year and 2022 despite threats posed by the more contagious Delta coronavirus variant, the country's economic ministers said on Monday.
Gross domestic product (GDP) is expected to expand by 6% to 7% in 2021, and 7% to 9% in 2022, rebounding from a record contraction of 9.6% in 2020, the Development Budget Coordinating Committee said in a statement.
The government is "optimistic that the country's GDP may return to its pre-pandemic levels as early as 2022," the DBCC said.
Vaccines are key
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said on Sunday an additional pandemic relief package would not improve the country's credit ratings prospects, in remarks days after Fitch Ratings downgraded the Philippines' outlook to negative from stable.
The decision to push for additional stimulus as the Southeast Asian country battles one of the region's worst and longest-running COVID-19 outbreaks is not within the central bank's mandate, Diokno said in a statement.
"I disagree, however, that legislating Bayanihan 3 will help us to improve our ratings prospects," he said, referring to the additional P401 billion stimulus package approved by the House of Representatives last month.
The measure seeks to provide additional cash to pandemic-hit households, state-run Philippine News Agency has reported. It is unclear if a counterpart measure has been proposed in the Senate.
Diokno said that to "immensely improve" the country's growth prospects and its ability to attract foreign investment, the Philippines must accelerate its COVID-19 vaccine rollout, pursue more structural reforms, and continue aggressively with an infrastructure development program.
Fitch concerned over rising debt
While Fitch has affirmed the Philippines' investment grade status, it sees increasing risks to the country's credit profile and downside risks to medium-term growth prospects.
Diokno expressed satisfaction over the pace of the country's vaccine rollout, the success of which, he said, is the key to a strong and sustained economic recovery.
"I'm positive that the vaccination program is on the right track," he said, highlighting a steady supply of doses from multiple sources and strong private sector support.
As of Tuesday, 3.89 million people, or 3.5% of the country's 110 million population, had been fully vaccinated, representing a small fraction of the inoculation target of up to 70 million adults.